The fed was very aggressive with cutting rates, and that affected rate-sensitive areas of the economy, such as housing and autos. That leaves us with a problem, which is a lack of pent-up demand in the recovery phase. |
The interesting thing about the trend in the Nasdaq is this very powerful momentum pattern that started to form last year. Until certain things happen, this momentum is going to remain strong. It's blown out targets. |
The main catalyst that people are looking at is tomorrow's jobs report. While there's a mix of many things going on in the market, the key thing to an economic recovery is jobs and income. That's why tomorrow's number is critical. |
The market is responding very directly to interest rates as kind of a one-dimensional thing -- fearful of inflation and I think that either higher rates may catch this market in 1997, or the flip side, lower earnings. |
The negative of last Friday's decline was not the decline itself, but the complacency of the decline. There's too much complacency. |
The stock market just cannot seem to go anywhere but down whenever the long bond gets above 7 percent, and that is basically what happened today. |
The strong dollar has done two very good things for the stock market: brought in foreign money and kept inflation low. Question is, 'What is the dollar going to do from here?' It's been weak for the last month. Will it still create that magnet for foreign investors? |
There may be some changes taking place, not just in the stock market but maybe in the global economy. |
We have to be patient with this recovery. It's not going to be a youthful one; it will be a slow, lumbering one. |
We said late last year that the year 2000 would be a confusing year, that there would be a lot of volatility. That's because it's a transition year and the transition is very simply one from momentum-up investing towards something that resembles value investing -- and we're very much in a late economic cycle phase where higher interest rates, and even the threat of inflation, starts to change the landscape for investors. |